MP Materials wins US$58.5M tax credit for Texas rare earth magnet factory to supply GM

MP Materials (NYSE: MP) is being funded US$58.5 million from the United States government to finish building the country’s first integrated rare earth magnet plant, one that will supply General Motors. 

The site in Fort Worth, Texas, started construction two years ago. It’s part of MP’s US$700 million plan to make neodymium-iron-boron magnets used in electric vehicles from minerals dug out of the company’s mine in Mountain Pass, Calif. Commercial production of precursor materials is to start this summer with finished magnets by late next year, MP said on Monday. 

Las Vegas-based MP Materials’ project was one of 100 others in 35 states up for some of the US$4 billion in tax credits announced last week. The company vied with about 250 applicants for the funding help in a “competitive, oversubscribed process” run by the Department of Energy, MP said. 

“Neodymium-iron-boron (NdFeB) magnets are the world’s most powerful and efficient permanent magnets,” the company said in a release. “They are an indispensable component found in the electric motors and generators that power hybrid and electric vehicles, robots, wind turbines, drones, electronics, and critical defence systems. Global demand is expected to triple by 2035.”

Half a million motors

MP has said the manufacturing plant would have the capacity to produce 1,000 tonnes of NdFeB magnets a year, supporting the production of about 500,000 electric vehicle traction motors, with room to scale up. It has a supply agreement with General Motors. MP produces magnet precursor materials in a pilot facility at the moment. 

The Mountain Pass mine is the country’s only rare earth mine and separations facility. About 15% of the country’s rare earths consumed annually is produced there.

At the factory, neodymium-praseodymium (NdPr) oxide produced at Mountain Pass will be reduced to NdPr metal and converted to NdFeB alloy and finished magnets in an integrated and sustainable supply chain, the company said.

Shares of MP Materials rose 5% to close at US$15.08 in New York on Monday, valuing the company US$2.7 billion. They’ve traded in a range of US$12.68 to $28.75 during the past 52 weeks.